(Pension Expense, Journal Entries) Ultra-Home Corporation provides the following information related to its defined-benefit pension plan for 2014.
Pension liability (January 1) $ 500,000
Accumulated benefit obligation (December 31) 1,250,000
Actual and expected return on plan assets 15,000
Contributions (funding) in 2014 210,000
Fair value of plan assets (December 31) 960,000
Settlement rate 8%
Projected benefit obligation (January 1) 1,500,000
Service cost 165,000
Instructions
(a) Compute pension expense and prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2014.
(b) Indicate the pension-related amounts that would be reported in the company's income statement and balance sheet for 2014.